We place our hope in an Almighty, unchanging God who has intended us good and loved us in Jesus Christ.

Wednesday, January 19, 2011

Housing Markets

I suspect that a link to Bloomberg news about housing starts being low is due to the fact that a huge generation is retiring or seeking to retire (thus saving and selling), and an interested but smaller following generation or two is not able to eat up the surplus. Why build which is expensive when you can buy one of the many lower priced homes? For a link to the news article click here. This is a socio-economic factor dealing with population, choices by age, and unemployment numbers still being higher than they should be.

I was reading in the USA today print edition the other day that the housing market was getting better. This sounded good, but the data conflicts it:

http://apnews.myway.com/article/20110127/D9L0M4603.html

This raises the question, is the USA today wrong or else just being optimistic writing what feels good to the journalist?

Economics professors suggest that demographics often overrule other factors. If there simply aren't enough buyers, housing will be a difficult terrain in the near future. Foreclosures being high and surplus housing means a lot of things, less housing jobs, less services needed. But it is ultimately a question of not enough buyers. This does have application to other fields. If you are in a business, your purchasing groups are changing. If you are in an old Methodist, Presbyterian or Baptist church, your congregation will see diminishing ability to support itself. If you are in a group that focuses on the buyers, people who dont already have all they need or want, that will be a smaller demographic. They will also be suffering an economic recession that isn't their fault, but is their inheritance. Just some economics research coming out...